Airbnb shares advanced 4.6% to close at $121.35 on Friday, buoyed by a first-quarter revenue projection that surpassed Wall Street expectations. The company's quarterly revenue increased 12% to $2.8 billion.
Upgraded Outlook
Deutsche Bank upgraded the stock to Buy with a $154 price target, citing a robust pipeline of new products and the benefits of its fee model as it expands into hotel supply and AI-powered search. Evercore ISI raised its rating to Outperform, setting a $145 target and highlighting ongoing product improvements that could drive growth through 2026.
For the current quarter, Airbnb anticipates revenue between $2.59 billion and $2.63 billion, exceeding the consensus estimate of $2.53 billion. The company reported $521 million in free cash flow for the fourth quarter and repurchased $1.1 billion of its Class A shares during the period.
Strategic Shifts and Challenges
CEO Brian Chesky described the company's recent momentum as "turning a cruise ship" rather than simply accelerating. While demand for premium listings remains resilient, the company noted budget-conscious travelers are beginning to reduce spending.
Airbnb does not expect its adjusted core profit margin to expand this year as it plans increased investment in marketing, product development, and technology. The company is also expanding its offerings to include services like private chefs and yoga sessions.
Investors are monitoring whether the stock can maintain its post-earnings gains when trading resumes Tuesday following the Presidents Day holiday. Key factors include booking trends, pricing power, and the impact of new payment options.
Potential headwinds include broader consumer spending pullbacks, increasing local regulations on short-term rentals, and competitive pressure from AI-driven booking platforms.
